Majestic Center Wellington, NZ, Photo by Dabbelju
The best countries in the world have a compelling mix of taxes, lifestyle opportunities, and business support. Let’s take a look at the best of the best.
Generally speaking, all of us have the same core wants and needs. The Human Development Index (HDI) attempts to boil these needs & wants down to a single number to allow country-to-country comparisons. In our estimation, your quality of life should be paramount in your planning and the HDI helps you do that. However, if you are reading this, more than likely you are also interested in the best place to start a business. We’ve tried to provide you with the essential data for that, too. In this essay, then, I’ve attempted to provide you with the basic data you need to decide on where to work and to live.
The table below is gathered from a number of reliable sources (OECD, World Bank, etc.) and each statistic uses a consistent methodology for all the countries listed. I will discuss the first four columns in this post and the remaining four columns in the next one.
Presenting: The Data
* The data isn’t available from a single source so Wikipedia has used a combination of CIA, World Bank and UN data. You can use the links on the Wikipedia site to get to the original data.
** This data is from the Heritage Foundation which is a conservative political group in the U.S. that views the U.S. as a socialist state. (!) That should be borne in mind when interpreting the results…at least for the U.S. In any case, most of these countries rank fairly well on the scale of ecoomic freedom.
Taxes are a complex issue that actually makes it impossible to perfectly compare tax burdens across countries, but it isn’t for lack of trying. We can safely say is that these data can affect the way you think about your life and your business. Tax data is presented in what is probably the only reliable way. There are so many variables that you must consult a professional before finalising any decision. Still, these numbers are fairly representative of the actual state of taxes in a country vs. what the laws say. The lower the number, the better your personal tax situation is likely to be.
You will find some cases, such as the U.S, where the nominal taxes are far higher than the actual taxes collected. For example, claimed billionaire, Donald Trump, may not have paid income taxes on fifty million dollars of personal income a year quite legally. It is important that before making any significant financial decision you think about the tax implications. With a good tax accountant or attorney it may be possible to use the deal to avoid taxes not only on the deal, but on other income you make as well.
Human Development Index
This score is incredibly important if you are going to raise a family or to hire competent workers in the country. The HDI covers three important aspects of your life:
- Can you expect a long and healthy life?
- Education: How educated is the populace?
- How likely are the folks around you to have a decent standard of living?
For education, of the countries on this list, New Zealand is second, Norway is third and the U.S. is fifth in the world for education. But it is the total package you should be concerned about and the HDI gives you that number.
Taxes, AEOI & FATCA
Our core belief is in a universal taxation system in which everyone would pay taxes on their wealth and businesses would pay no taxes. Perhaps one day we’ll explain why this is so, but because that is unlikely to happen while our species is dominant. We’ll set that discussion aside for another time. In the real world, FATCA and AEOI are going to make tax avoidance for those wishing to live in a nice country, almost impossible. Almost. But if you are willing to live a peripatetic lifestyle, then you have the possibility of never living 183 or more days in a single location.
For non-Americans, that can make it possible to avoid personal income taxes completely. If you prefer to live a stable life in a decent country such as one of the ten listed here you will pay some income taxes. Your task is to find the country that best matches your criteria for a good place to live and do business while minimising your tax burden.
Ease of Doing business
How easy is it do deal with governments and banks? These are the criteria included in the index:
- Dealing with construction permits
- Getting electricity
- Registering property
- Getting credit
- Protecting minority investors
- Paying taxes
- Trading across borders
- Enforcing contracts
- Resolving insolvency
More than a few people would yawn at the idea of economic inequality being a problem because they hope that they will be at the top of the heap looking down. We often think that way because our minds are utterly unable to comprehend the level of inequality in the world. I shall try to give you an idea, though:
Let’s say that you have one million dollars in the bank. We will assign your one million dollars the height of one pixel on a chart. Twenty-eight million dollars would make a line 28 pixels high. That’s just a bit more than a centimeter. So your line is 1/28th cm tall. About 1/3 mm.
Bill Gates has been busily giving away his money for sixteen years now and has engaged in it exclusively for the past eight years, and yet his net worth is now 85.9 billion dollars. His line next to your pixel is going to be 89500 pixels tall. your wealth is 1/28th of a centimeter. In order to see his line fully, you will need a screen 32 meters tall. And most of the people in the world don’t have even the wealth that an atom would represent in that scheme. That is inequality.
Final Thoughts for Part I
By and large, it is consumption that drives the production pump. However, when there is gross inequality, money is unavailable for consumption and so producers don’t produce. For that reason you want your business to be in a country with a relatively low inequality (GINI) coefficient.
Start a business in a country that scores well on taxes, human development, the ease of doing business and economic equality and you are well on your way to living a long, prosperous and satisfying life.
There is no perfect country for starting a business, but these are some of the best by any objective measure. We can help you get up and running in several of these countries. Save time, money and aggravation. Connect with us.